Developers on #GST Bill Passes from Rajya Sabha —
Please refer below for the inputs by developers on GST Bill passed from Rajya Sabha
1. Ashok Gupta, CMD, Ajnara India Ltd.
With the dawn of concepts like hustling in service tax coupled with reductions and various mandatory charges collected by developers these days, highlights the importance of having a same tax base which can be only answered by GST. A single tax rate across the country will promote fair practices which will further encourage transparency and less evasion in the sector that supports in future growth of demand for real estate.
- Kushagr Ansal, Director, Ansal Housing
Now days, there are developers and builders who are constructing projects in different states, specially tier 2 cities and thus have to abide by the state specific VAT laws, service tax and corresponding compliances. The presence of several indirect tax components faced by the developers at present are a major cause that bring tax inefficiency in this sector. A simplified tax structure would also mean that property prices would come down considerably enabling better affordability for people looking for property options in tier 2 and 3 cities.
- Deepak Kapoor, President CREDAI-Western U.P. & Director, Gulshan Homz
Implementation of GST will basically work on three major elements for this sector; simplification of tax structure, reduction in construction costs and better transparency. Speaking about its contribution post acceptance, we are predicting a nationwide realty sector growth by almost 15-20 percent than projected in the course of next 5-7 years. There will be a quick reaction towards the sector by its customers as demand is bound to increase due to reducing costs and improving transparency in the sector that has been the hurdle making this sector suffer for long now.
- Dhiraj Jain, Director, Mahagun Group
Currently, the homebuyers of this sector are under the pressure of two forms of taxes; service tax and VAT on the purchase of residential units when booked prior to its completion. There are numerous components of non-creditable tax costs such as CST, entry tax, customs duty, excise duty, etc. which is duly paid by the developer on its procurement side which are basically ingredients for the cost pricing of the units.
- Vikas Bhasin, MD, Saya Group
There is no doubt that multiplication of taxes will be curbed through GST, but the only question will be what rate gets decided. The only dampener for this sector can be high GST rates, such as 27 percent GST that has been making the rounds as this will counterpoise any possible gains on incremental credits. Also, stamp duty is not proposed to be incorporated under GST and will thus continue to remain as it is at present. Therefore, decreased cost of construction will take place once a lower bracket of GST is applied as the developers will be liable to pay much less than today, thereby allowing cost of units to fall which will directly benefit the end users.
- Manoj Gaur, President CREDAI-NCR & MD, Gaursons India Ltd.
A well-defined GST implemented for the country will bring about a relief for this sector and its customers. Commercial realty players will be hugely benefited as all the lost Cenvat credit, which is in current regime a cost to commercial developer can be availed if GST is applied in a free flow manner that will also help in reducing costs. A much simplified single tax rate, reduced construction costs and better transparency in the sector will be much welcomed by the developers and its customers.